CHINA'S GRASP ON EUROPE

By Alistair Law

China is expanding fast and is looking for allies, close allies. It is seeking allies in Europe to try and firstly; improve relations, and get a grip on the west, which is currently dominated by America. It is doing so with a political power called ‘soft power’. This is by influencing countries to form closer ties by supporting them financially or using your culture to influence said country. But how is China doing this?

China is currently on a huge spending spree of $1 trillion to improve connections, infrastructure wise, in Eurasia and Africa. As I talked about in my previous article, China are using this scheme to strengthen ties with other countries by lending money to them from state-owned banks, who are borrowing from British banks. By plunging countries into debt, if something happens that China needs to call upon its allies, countries have to respond in favour of China in order to continue to get funding. This is essentially a financial way to force countries to join your side. This means more votes for China in the UN and in other influential bodies, like the EU. Britain itself is becoming ever closer to China, by not only lending to them, but also opening the new direct freight rail service between Yiwu City in Eastern China, to Barking in East London. This freight train can carry 34 containers and runs once every week but what is the point in this project? To extend China’s power in Europe.

Secondly, China are using their financial position to exploit countries in Eastern Europe. China have formed ‘Team 16+1’. It consists of countries that are in the EU as well as those wishing to join the EU like Bosnia, Albania, Macedonia, Montenegro and Serbia. The 11 countries in the EU were promised funding by the Chinese Communist Party to build key infrastructure projects and contribute to investment into the country. Hungary hailed it as the, “Eastward Opening,” while Serbia see it as a, “Reliable friendship,” and Poland described it as a, “Tremendous opportunity.” Chinese companies announced that in 2012, they have invested $15 billion into these countries. Examples of these projects are a $1.5 billion highway in Bosnia as well as a different company agreeing to build a highway between Albania and Montenegro. Bear in mind that these companies are stated owned so the CCP control what these companies do. And what do these countries give back in return? A vote for China in the EU. In 2013, the European Parliament called for the investigation into the claims of organ harvesting in China and again in 2016, there was a Written Declaration from the European Parliament to call a stop to the organ harvesting of prisoners of conscience and every year, the EU make a statement regarding China’s human rights. However, in 2017, Greece blocked this along with other countries in Team 16. But why did Greece do this?  

Greece was squeezed by the EU for money, especially during the Global Financial Crisis of 2008. As Greece swam in its debt, the CCP came in and saved the day for Greece by providing funding for projects such as improvements in telecom, energy and port infrastructure. One example of a port that has been taken over by the CCP as part of their One Belt One Road scheme, is Pireas port, just outside Athens. It is the largest port in Greece and one of the largest in the Mediterranean. Yet, in 2016, Greece allowed Cosco, a Chinese shipping giant, to buy a 51% stake in the port for just $330 million, meaning Cosco effectively owns the port. This port can be used by China to export Chinese goods into the European market, not to mention the new freight line into the UK. China called the port its ‘Dragon Head’ into Europe. However, the workers at the port have been exploited. Salaries have been cut and some full-time staff have been put on call, creating job insecurity. The Greek prime minister, Alexis Tsipras, was a huge fan of China and hence allowed for China to effectively exploit Greece as a Chinese state-owned company bought a 24% share into the power grid and Tsipras signed a deal for China to invest $500 million into a fibre-optic network across Greece in 2016. China can use Greece as a gateway into Europe, through the former Yugoslavian countries, which are part of Team 16+1, and into the heart of Europe.

China is really starting to get a grasp onto Europe and is on our doorstep. But how sustainable is their way in, or will it collapse as China’s debt bubble bursts? If it does, it could cause havoc, another global recession because China is now the second largest economy. It could have a severe impact on the world as a whole as so many countries are now dependent on China to perform well, so if China crashes, then the ripple effect will be worse, and could have detrimental effects on a post-Brexit Britain.

Having looked at China’s future, you can look at China’s less open past with Neel Shah’s article here